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Vinson Kurian

THIRUVANANTHAPURAM, July 3

WHILE the future of the Indian software sector seems bright, lack of proper implementation of the GATS provisions and inadequate liberalisation in Mode 4 may dampen prospects in this sector, according to a status paper on problems encountered by Indian IT and other professionals in the European Union, prepared by the Global Organisation for People of Indian Origin (Gopio).

Mode 4 deals with temporary movement of persons from provider-country to consumer-country for delivering services. This is of special interest to India, according to the report, a copy of which was made available to Business Line. Information technology is one of the priority areas for India and the EU in order to deepen their economic partnership. With the slowdown in the US economy, Indian software firms are making a beeline for Europe. But unlike the US, European markets are complex, with wide differences in language and culture. The slow economic growth in the EU countries is also contributing to several problems for professionals from India.

The Gopio input was prepared in the light of recent developments in Holland (following Malaysia) when Indian software professionals were detained and expelled for alleged visa irregularities. These are disturbing developments for the Indian software industry, the report said. It also takes into account the development in the US with respect to Business Process Outsourcing (BPO) and its likely effect in the EU countries. India needs to tackle these problems in more proactive ways, the report said.

EU countries are likely to face a massive shortage of skilled labour in coming years. Western Europe stands to lose $380 billion due to the shortage of skilled IT staff alone. The EU countries have to find out what is inspiring IT professionals from India to head for the US and why Europe is failing to evoke any palpable excitement among Indian techies.

The IT budget for Western Europe this year is $363.4 billion. This is expected to increase to $584.1 billion by 2004. It is estimated that the demand for IT professionals in the EU will be around 13.07 million by 2003.

The following are the most significant issues confronting Indian professionals.

Immigration- related issues: Visa-related issues are the most critical barriers affecting the Indian software professional. Immigration regulations impose quantitative restrictions on the movement of persons with an aim to create a protected labour market. Not only do the regulations change depending on the economic and political situation prevalent in the regulating country without considering the needs of other countries, but there is also a lack of adequate transparency in the immigration procedures. In many cases the professionals are not allowed to bring in their families.

Lack of recognition: Inadequate recognition of qualifications, training and experience restrict the opportunities for software professionals from India to provide services overseas. Several EU countries have certain restrictions concerning issuance of visas based on the qualifications and experience of the applicant. However, though the applicant may not satisfy the criteria, he may still qualify for the job.

Differential treatment: Trade in Mode 4 is also restricted due to the policies, which differentiate against foreign service providers. Some of the issues in this area include imposition of stringent conditions for eligibility concerning residency or citizenship.

GATS commitments: To enable Indian professionals to get fair treatment in the EU countries, the GATS should improve their horizontal commitments in Mode 4 to specifically include individual professionals, eligibility criteria, uniformity in definitions of different classes. It should seek to include middle- and lower-level professionals in the category of other persons or specialists. In the above context, countries should ensure that the visa application procedures are transparent; they should also try and simplify visa application procedures. Less stringent norms should be imposed for entry and stay of software professionals in the country.

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